Agriculture Chatter at China's "2 Sessions"

Discussion of agriculture has not been prominent at China's "two sessions" this week. The emphases were on raising money for stimulus through bond issues, boosting lending by state banks, stimulating consumption, supporting advanced industries (biological manufacturing, quantum technology, 6G, AI+), addressing local government financial problems, solving the property market crisis, "green development," private enterprises, and higher education.

In his "Minister's Channel" press conference discourse on food security, Minister of Agriculture and Rural Affairs Han Jun reported that China had produced more than 700 million metric tons of grain last year despite drought and typhoons. Minister Han went on to stress the importance of raising yields through science and technology and implementing policies to ensure grain is profitable and prices are reasonable. He noted that grain supply and demand is overall in tight balance, but China has a persisting deficit in feed grains while having achieved self-sufficiency in staple food grains rice and wheat. Han blamed last year's weak demand and big imports for depressed farm prices. He said government departments are intervening in the market by buying up grain for reserves and "adjusting" imports and exports.

Minister of Agriculture and Rural Affairs Han Jun speaks
at a "2 sessions" press conference Source: Farmers Daily.

China Feed Information Net highlighted comments by feed and livestock company executives at the Chinese Peoples Consultative Committee (CPCC). 

Liu Yonghao, founder and CEO of New Hope Group--a leading producer of feed, pigs, poultry, and milk--and Qin Yinglin, CEO of Muyuan Group--China's largest pig-farming company--echoed the science and technology theme. Liu noted the strategic importance of improving China's livestock and poultry breeding system to improve the core competitiveness of the industry and called it "a top issue" for agriculture. Muyuan's Qin cited the importance of promoting intelligent development of the pig farming industry and called for building a scientific breeding system. 

At the National Peoples Congress (NPC) a county-level official from Heilongjiang Province raised concerns about the plight of China's high-end beef cattle industry. He pointed to the weak breeding system and reliance on imports for basic genetic material as problems that need to be addressed to bring down production costs. 

The CEO of a poultry company in Hunan Province cited an apparent contradiction between the detection of chloramphenicol in national food safety testing while he claimed that no chloramphenicol-based veterinary drugs are sold on the market. He claimed that food contaminants are introduced throughout the supply chain, and businesses like his are unfairly hurt by detection of food safety hazards. He called for more clarity of responsibilities, more rigor in sampling of food for testing, and insisted that production enterprises should not be required to prove their innocence.

A village party official in Henan Province told the NPC that policy banks should make more loans to support the agricultural industry, improving connections between banks and industries, streamlining the loan process, and setting quotas to ensure that funds actually flow to agriculture. 

The Party Secretary of China Agricultural University jumped on the theme of improvements in higher education at the CPCC to request "urgent" support for agricultural professors, improvements in the evaluation system for professors, and stable support for young faculty. He recommended collaboration with foreign institutions but also called for Chinese agricultural universities to raise their international profile to create a "Chinese brand" of international cooperation and to promote Chinese-style higher education in agriculture worldwide.

Not to be outdone, a dean from Sichuan University demanded investment to create leading agricultural universities in China's western provinces. He called for constructing major platforms for biological breeding to create self-reliance and self-improvement in the field.

China's Grain Procurement Doubles in One Year

China reported that 308.8 million metric tons (mmt) of last fall's grain crop had been procured as of the end of February 2025. This is more than twice the amount procured a year earlier. The announcement in State media did not mention the huge increase nor explain how such an unprecedented increase in grain procurement was achieved. 

Economic Daily reported that procurement by all types of enterprises included 105 mmt of rice, 190 mmt of corn, and 10 mmt of soybeans. 

The State Administration of Food and Commodity Reserves reported only the total procurement of 308.79 mmt of fall grain with no data for individual grains except mentioning that 7.11 mmt of middle and late rice was procured through the minimum price program. 

In past years the Administration regularly reported procurement progress statistics for each type of fall grain from October through April 30 on a monthly or 10-day interval. But this year only 3 monthly reports have been posted at the end of December, January and February with no detail on procurement of each grain. 

Comparison with Fall grain procurement reports from the previous 3 Februarys shows that this year's procurement volume as of February is twice as large as in previous years. This year's procurement through February exceeds fall grain procurement for the entire season last year (200 mmt).

Source: data compiled from China's State Administration of Food and Commodity Reserves web site.

China's National Bureau of Statistics reported an 11-mmt increase in the fall grain harvest in 2024 over the previous year, but this increase does not account for the huge 150-mmt increase in procurement.

Summer grain procurement reports are issued from June through September 30. Last September the Food Reserve Administration reported that 75 mmt of summer grain had been procured from the 2024 crop. This was up 6.4 mmt from the previous year's 68.6 mmt, a more plausible increase. 

The Economic Daily announcement seems aimed at encouraging farmers to continue planting grain for next fall's crop as they face weak prices with spring planting approaching. Economic Daily commented that procurement is proceeding smoothly, in an orderly manner, and prices are rising steadily. The article highlighted the government's purchases of 7% of the fall rice harvest at the minimum price set by the government in order to stabilize prices and recent increases in corn prices.

The procurement volumes reported in past years appeared to be inconsistent with China's production data. For example, the 200 mmt procured during last year's procurement season was only 38% of the fall grain harvest. It is unlikely that more than 60 percent of grain remains on farms. The purchases are by all kinds of grain enterprises (各类粮食企业). Perhaps the statistical system found a way to account for purchases by itinerant traders who cruise villages purchasing grain by the truckload who had failed to report in previous years. 

Expanded list of U.S. goods hit with 10% tariffs

China's official list of U.S. agricultural products subject to 10-percent additional tariffs announced March 4, 2025 is much broader than reported in yesterday's post on this blog. The list of products targeted for 15-percent tariffs is unchanged. Tariffs will go into effect March 10, 2025, according to the announcement.

The 10-percent tariff product list includes 711 tariff lines that cover most major U.S. agricultural exports to China. In addition to the soybeans, sorghum, beef, pork, and offal reported yesterday, additional 10-percent tariffs will be applied to fish and seafood (fresh, frozen, and processed products), most dairy products, vegetables, fruit, nuts, potato flour, fish oil, and processed nuts, fruits and vegetables.

The 10-percent tariff list does not include whey, alfalfa, peanuts, vegetable oils, grass seed, vegetable seeds, live plants and flowers, live animals, turkey, guinea hens, lamb, ginseng, honey, pet food, distillers grains, fish meal, or leaf tobacco. Also excluded are food ingredients, lactose and other sweeteners, confections, chocolate, coffee, tea, spices, malt extract, infant food, wine, beer, and whiskey.

Goods shipped from the place of departure before March 10, 2025, and imported between March 10, 2025 and April 12, 2025, will not be subject to the additional tariffs. 

China's General Administration of Customs also announced March 4 it is suspending imports of soybeans by 3 trading companies (CHS, Inc., Louis Dreyfuss, EGT LLC) due to detection of ergot fungus and seed coatings on soybeans imported from the United States during recent inspections. The suspension takes effect immediately.

China's Customs authority is also suspending imports of U.S. logs due to detection of forest pests such as bark beetles and longhorn beetles in logs imported from the United States.

China Sends Ag Minister to Uruguay Inauguration

China sent its agriculture minister to the inauguration of Uruguay's President Yamandú Orsi in Montevideo. Why would China send its agriculture minister--in office for less than a year--to the inauguration of an important Latin American ally?

According to State media, Minister of Agriculture and Rural Affairs Han Jun was appointed as Xi Jinping's special envoy to the March 1 inauguration. Minister Han met with President Orsi at the presidential palace to convey greetings and best wishes from China's leader.

(The Uruguay trip explains why Minister Han was absent from a prominent meeting to discuss China's seed industry held the same day as the inauguration.)

President Trump chose Alabama Senator Katie Britt to attend the inauguration. Several South American countries sent their presidents, as did Armenia. Germany sent its low-profile president Frank-Walter Steinmeier.

Minister Han Jun

Senator Katie Britt

Orsi has promised a leftward shift from previous President Luis Lacalle Pouin, a shift that seems favorable to China's Latin American ambitions. Uruguay's political shift is similar President Lula Da Silva's return to power in neighboring Brazil which warmed relations with the Middle Kingdom.

China has been pushing for a trade deal with Uruguay since 2021 and made a concerted effort to draw Uruguay into its "Belt and Road" sphere in 2023. Lula apparently did not attend the inauguration, but Da Silva just invited Uruguay's new president to attend the China-dominated BRICS summit in Rio de Janeiro coming up in July.

Maybe Minister Han was the only official available for the trip, or maybe he was the only one Xi thought he could trust. But the importance of agriculture in Uruguay seems to be a logical explanation for choosing Minister Han to represent China at the inauguration. 

Uruguay has become a significant exporter of food to China. In 2024 China's imported $2 billion worth of farm products from Uruguay, but nearly all of it was composed of beef and soybeans. China's $892 million of meat imports was composed mainly of beef, plus $14 million of lamb. Imports of soybeans were over $1 billion. Uruguay is the 4th-ranked supplier of China's beef and soybean imports and supplies roughly 9%-14% of China's imported beef and just 2% of China's imported soybeans.

Harmonized system codes 02-24.
From China Customs Administration web site.

However, China's agricultural imports from Uruguay are not exactly booming. China's imports of Uruguayan beef were on a steep growth path until 2022 when their value peaked at $1.9 billion. China's beef purchases from Uruguay plummeted to $870 million in 2024. A Uruguayan exporter was one of 7 beef companies suspended by China Customs yesterday.

China Customs Administration data.

China's imports of soybeans from Uruguay have bounced between $500,000 and $1 billion in most years since 2015, peaking at $1.27 billion in 2022. China reported no soybean imports from Uruguay in 2023, apparently due to drought in the South American country. There is a history of quality issues including excessive moisture and high temperature in soybean shipments from Uruguay to China, addressed by a 2017 bilateral agreement. But last fall there were reports that private terminals were preventing external inspectors from checking vessels.

In relations with "Belt and Road" countries China's agriculture ministry is mainly involved in offering technical assistance and coordinating outbound Chinese agribusiness investment. It would appear China has little to offer Uruguay in assistance to beef or soybean growers in Uruguay since China does poorly in growing both of these commodities and is highly dependent on imports of both beef and soybeans. 

During a July 2024 China visit by Uruguay's Minister of Livestock, Agriculture, and Fisheries of Uruguay the two sides pledged to work on beef production, hold a meeting of the China–Uruguay Joint Committee on Agriculture in China, and set up Chinese demonstration farms focused on green, digital and intelligent agriculture in Uruguay.

The banned Uruguayan beef exporter was dinged for having excessive levels of a compound used to control ticks in cattle. Technical problems with imports are chiefly handled by China's customs authority. A study by Chinese scientists found that soybeans with Uruguayan genetics had lower protein content than Chinese soybeans, but the study may have little relevance since the experiment grew both types of soybeans in Chinese fields and did not use commercial seed. Nor did the study take into account that Chinese soybeans are actually not in high demand.

Maybe China will offer to build a rice demonstration farm since rice is a relatively minor crop in Uruguay. Another possibility is that Han will negotiate deals for Chinese beef companies to invest in Uruguay to ship beef to China or Chinese grain-trading companies to buy a shipping terminal in Uruguay to facilitate shipping and inspection of soybeans to China. 

China announces extra tariffs on $19.5 billion of U.S. farm products

(see update of 10-percent tariff list)

China announced retaliatory tariffs on U.S. agricultural products today that will be added to imports of products that accounted for about $19.5 billion of Chinese imports of farm goods from the United States last year. Based on calendar-year 2024 import data from China's Customs Administration web site, 15-percemt tariffs will be added to $3.43 billion worth of U.S. agricultural imports and 10-percent tariffs will be added to $16.06 billion of U.S. agricultural imports.

Among the $3.4 billion in U.S. products targeted for 15-percent tariffs, cotton, corn, wheat and chicken accounted for most of the imports from the United States last year. According to China's Customs Administration, calendar year imports from the United States were as follows:

• Cotton imports from the United States totaled $1.85 billion, comprising 35% of China's cotton imports last year. 
• Wheat imports from the U.S. totaled $600 million, 17% of the total.
• Corn imports from the U.S. totaled $560 million, 15% of China's corn imports last year.
• Chicken imports from the U.S. totaled $419 million, 14% of all chicken imports. Chicken feet and paws made up more than half of chicken imports ($228 million, 14% of all imports) 

Among the $16.1 billion of U.S. products that will be assessed 10-percent tariffs, soybeans were by far the largest component, followed by sorghum, beef, and swine offal.

• Soybean imports from the U.S. totaled $12 billion in 2024, 23 percent of China's soybean imports according to China's customs data. The volume was 22.12 million metric tons. (In addition to these totals China has a separate tariff line for non-GMO soybeans which China did not import from the U.S. last year.)
• Sorghum imports from the U.S. totaled $1.7 billion, 66.8% of China's sorghum imports in 2024. The volume was 5.68 million metric tons. 
• Beef imports from the U.S. totaled $1.430 billion, 14 percent of the total.
• Swine offal imports from the U.S. totaled $695 million, 28% of imports. 
• Imports of U.S. pork totaled $164 million, 4 percent of all imports.

The importance of China as a market for U.S. products targeted for tariffs is indicated by USDA export data for calendar year 2024: 

• China accounted for 51 percent of U.S. soybean exports   
• China accounted for 90 percent of U.S. sorghum exports
• China accounted for 28 percent of U.S. cotton exports
• China accounted for 2 percent of U.S. corn exports 
• China accounted for 9 percent of U.S. wheat exports
• China accounted for 64 percent of U.S. swine offal exports and 5 percent of swine meat exports
• China accounted for 15 percent of U.S. exports of beef and products

China Plans a "Silicon Valley" for Seeds

Worried that its fragmented seed industry is falling behind multinational companies, China is finishing up a 10-year plan to create national champion seed companies. A 2-year-old plan hatched by Xi Jinping to create a "Silicon Valley" for seeds--the so-called "silicon chips of agriculture"--has big ambitions, but it depends on funding from overextended State banks and the basic matter of acquiring farmland to grow the seeds.

On March 1, the Ministry of Agriculture and Rural Affairs (MARA) held a meeting to boost implementation of a 2023-2030 "South China Seed Silicon Valley Construction Plan." According to the Ministry, the project will build a sprawling complex of labs and testing/propagation farms in Hainan Province, a region where seed breeders have long focused their work due to the ability to grow crops year-round in the sub-tropical climate. The South China zone is planned to be a center for seed breeding innovation in China, a platform for international cooperation, and an experimental zone for reforming the country's seed industry.

The "Silicon Valley" scheme is described as an upgrade from the 2015-2025 "National South China Seed Research and Breeding Base (Hainan) Construction Plan" that called for setting up a 44,150-acre protected zone for crop breeding around the Yazhou Bay "Science City." In a 2018 inspection, Xi Jinping praised the South China Seed Base as a national treasure and ordered construction of a "Southern Silicon Valley" that would concentrate R&D, production, sales, scientific exchange, and dissemination of seeds to serve the entire country.

The 2025 Central Document No. 1 on rural policy--released to the public just a few days before the meeting--included the "South Silicon Valley" project in its instructions to revitalize the seed industry. 

A symposium on revitalization of the seed industry held by MARA December 19, 2024 made it clear that the effort is aimed at making China great again. MARA described seed industry revitalization as having a prominent position in building China into an agricultural power by achieving self-reliance and self-improvement in seed technology and independent control of seed sources and ensuring the security of the agricultural industry. 

Chinese leaders seem worried that their industry is falling behind multinational seed companies. At the seed industry symposium, Agriculture Minister Han Jun warned that China's seed industry still has many shortcomings and weaknesses, "international giants are seizing the commanding heights of seed technology," and "the domestic seed industry is in urgent need of innovation, breakthroughs, and upgrades." 

China's seed industry plan reflects chronic problems of fragmentation between R&D (conducted mainly by research institutes) and marketing of seeds done by thousands of companies that traditionally conducted little or no R&D. Incentives for academic scientists to create seeds that meet market demand were muted when scholars stood no chance of profiting from their research. Profits from successful seeds were shrunk by widespread copying and fraudulent imitations.

The December seed industry symposium called for 

• creating a commercial breeding system with companies as the main body
• nurturing and strengthening a group of high-level seed companies
• deep integration of production, education, and research

Ag Minister Han Jun said support policies should be targeted at seed companies to help them breed a new batch of varieties that improve yield, performance, and quality. These include financing and insurance for companies. Han also emphasized protection of intellectual property and a crackdown on "infringement and illegal crimes" to "purify" the seed market.

The rationale for the South Silicon Valley Seed project is made clear by Minister Han's comments at the December seed industry revitalization meeting. Han called for innovative mechanisms to share and utilize resources and facilities to promote cooperation between S&T companies. This includes linking up seed companies with scientific institutes and financial institutions via seed bases. Han called for new ways to utilize scientific and technical expertise, application of artificial intelligence in breeding, construction of digital facilities and equipment to keep up with the world's cutting-edge pace in breeding. 

Source: The Paper.

According to state-owned news magazine Liaowang, the Hainan Provincial seed lab, China Seed Group's Syngenta, and Huada Genetics have been working together on projects since 2021. Liaowang reported that Hainan has gathered more than 2,800 seed industry companies, and the output value of the South China Seed Industry exceeded 12 billion yuan in 2023, a year-on-year increase of 50%.

The December 2024 meeting was attended by heads of China's elite seed companies, such as Syngenta China, Longping High-Tech, Beijing DBN, Beidahuang Kenfeng Seeds, Hefei Fengle, Shandong Denghai, and Gansu Dunhuang, as well as companies engaged in poultry, swine, aquaculture, and feed manufacturing, academic institutions such as the Chinese Academy of Agricultural Sciences, two agricultural universities, and state-owned banks Agricultural Development Bank of China and Agricultural Bank of China.

None of these articles mention problems acquiring land for the giant seed project. A Hainan Province regulation to facilitate acquisition of land for the South China Seed Breeding Base published last week reveals that progress in acquiring fields for the 44,150-acre protected zone designated 10 years ago has been slow because many Hainan farmers have been unwilling to turn over their land, there are a bewildering array of intermediaries to deal with in acquiring land, procedures are not standardized, and length of land contracts varies.

One step China took to compete with multinational seed companies was to buy one of them. In 2017 ChemChina paid $43 billion to acquire Swiss agrichemical and seed breeder Syngenta, China's largest overseas acquisition. Syngenta is still headquartered in Switzerland. Plans for a public listing of Syngenta in China--anticipated to raise $9 billion--have been scrapped due to the poor state of China's stock market. 

In their U.S. business Syngenta and its American CEO are now caught up in the frenzy over Chinese ownership of U.S. farmland. Syngenta owns multiple farms in the United States used for crop trials, and Arkansas has already ordered Syngenta to sell its 160 acres in that state. This raises the question of how the company will develop and test chemicals for the large U.S. market for seeds and farm chemicals if it cannot own any land there.

Syngenta announced last week that the company has made a deal with the Shanghai government to build its 3rd global crop protection innovation hub at a site in Shanghai (the other two are in Switzerland and the UK). This giant facility will focus on crop protection chemicals, biologicals, soil health, sustainable chemistry, and integrated pest management.

Insecurity Pervades Technocratic No. 1 Document

China's 2025 Central Document No. 1 appears on the surface to be a bold technocratic plan to reshape and modernize the countryside and forge links with the urban economy. A closer inspection indicates insecurity about depressed prices, peasants falling back into poverty, and farming sectors in need of protection and aid. 

The document--a blueprint for this year's rural policies--rehashes ideas that have been put forth in these documents for years. For example, this year's call for a severe crackdown on smuggling of agricultural products has appeared in 12 of 16 "No. 1" documents issued since 2010. 

Likewise, nearly every document orders officials to prevent loss of arable land to nonfarm uses, but this year's document adds instructions to stop specific activities--hiding rural vacation homes in faux greenhouses, digging lakes and building houses on farmland--suggesting that these activities have become rampant. It bans urban people and retired cadres from buying rural houses. This year's document instructs officials to stop farming land on river banks that affect flood safety--perhaps a problem noticed during last summer's severe flooding. One new item is the document's order to protect traditional terraces built to grow rice on mountainsides.

Another outcome of last year's flooding is concern about vegetable supplies. The document orders strengthening of vegetable emergency supply bases around medium and large cities. 

Orders to prevent erosion in northeastern black soil region appear in the document in most years, but this year's document adds a new problem of "erosion gullies" to be addressed. Other soil problems are reflected by instructions to conduct pilot projects to utilize saline/alkaline farmland and stronger management of acidified and degraded land in southern regions.

Remarks by deputy chairman of the Central Financial Leading Group explained the document's pledge to create a complete agricultural supports system and to coordinate foreign trade with farm production reflects insecurity regarding low farm prices. The official reveals a series of specific price stabilization measures: the minimum price program for rice will be activated by purchasing rice in four provinces, the government will stockpile wheat and corn, and unspecified measures will increase soybean sales and promote processing. He also promised unspecified adjustment of the subsidy for cultivated land fertility, improved subsidies for corn, soybean, and rice producers, and a pilot program to subsidize credit for grain and oilseed producers. 

The No. 1 Document promises to sharpen incentives for local officials to boost grain output and rehashes an old idea to make rich eastern provinces pay "real money" to grain-producing provinces. 

An instruction to strengthen the biosafety inspection system at ports (which appeared in last year's document and many others) shows up in a paragraph that calls for improving the coordination mechanism between agricultural product trade and production. This suggests that inspections at ports can be made stricter when authorities want to slow down imports to ease downward pressure on domestic prices. 

The document includes a promise of a bailout for beef and dairy cattle industries. Another copy-paste policy is the instruction to boost production of fodder for ruminants and upgrade hay and fodder industries. Bad behavior in the hog industry apparently continues: the document calls for strict supervision of hog slaughter and quarantine, and it urges stronger prevention and control of major animal diseases and zoonotic diseases.

The Ministry of Agriculture and Rural Affairs held a meeting last week to address problems in the hog industry. The meeting's main theme was that there are too many sows and the number of piglets to be produced in coming months threatens to drive down prices. The directives hinted that local officials should raise entry barriers by implementing stricter environmental regulations and land approvals for farm construction. The Ministry described the disease epidemic situation as complicated and warned of continuing risks of foreign disease epidemics spreading to China. Officials were instructed to strengthen prevention and control of African swine fever, and promote immunizations against swine fever, foot-and-mouth disease, blue-ear disease, and pseudorabies. Officials were ordered to quickly deal with epidemics and hidden dangers. The document also ordered crackdowns on other old nagging problems--use of illegal feed additives like clenbuterol and illegal slaughter.

Preventing rural areas from slipping back into poverty is a second theme of this year's No. 1 Document. Among the recommendations are big job-creation programs, a stratified public assistance program for rural people, and organizing work units and companies in coastal provinces to assist poor western provinces. 

Another reflection of the poor state of the Chinese economy is a renewed initiative to force employers to pay overdue wages to migrant workers. The document instructs cities to allow migrants with steady employment to participate in urban life and let their children go to school. Instructions to improve nutrition of rural school children, expand coverage of rescue and protective institutions for juveniles and improve care for children left behind in villages by migrant parents and for children in "difficult situations" are also included in the document.

A section on rural governance reveals the regime's fear of rural instability and gives some hints about the chaos in many parts of China's countryside. There are instructions to improve the mechanism for cracking down on gangsters, gambling, rural drug abuse, pyramid schemes and fraud in agriculture, and curbing the spread of "village tyrants" and evil forces of family clans. Another danger to the regime is religion--the document calls for stronger management of rural religious affairs. 

Other rural hazards are reflected by instructions to investigate and rectify safety risks in rural road traffic, gas, fire protection, and self-built houses.